BA 384T—FINANCIAL ACCOUNTING
James Noel                                 BA 384T—Fall 2002                                                         page ...
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James Noel                                BA 384T—Fall 2002                                                       page 4

James Noel                                BA 384T—Fall 2002                                                   page 5

James Noel                               BA 384T—Fall 2002                                                      page 6

James Noel                      BA 384T—Fall 2002                                                page 7

James Noel                        BA 384T—Fall 2002                                                      page 8

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James Noel                        BA 384T—Fall 2002                                                    page 9

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James Noel                       BA 384T—Fall 2002                                                  page 10

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James Noel                     BA 384T—Fall 2002                                                 page 11

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James Noel                     BA 384T—Fall 2002                                      page 12

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James Noel                     BA 384T—Fall 2002                                                   page 13

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James Noel                        BA 384T—Fall 2002                                                      page 14

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James Noel                     BA 384T—Fall 2002                                                   page 15

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ACC 386K.4, Analytical Research in Accounting


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ACC 386K.4, Analytical Research in Accounting

  1. 1. THE UNIVERSITY OF TEXAS AT AUSTIN BA 384T—FINANCIAL ACCOUNTING FALL 2002 Professor James Noel Office CBAS 6.304B Office Hours MW 3:30 PM-5 PM or by appointment Phone 232-9158 (Department Office: 471-5215) E-Mail Course Web Page Cohort VI Teaching Assistants Tim Evers, Sachin Adhikari Weekly drop-in Help sessions – Tuesdays 6-7 PM, Room TBA Office Hours and Locations—see course web page for details “A pupil from whom nothing is ever demanded which he cannot do, never does all he can.”—John Stuart Mill Course Objectives This course introduces the concepts and issues of financial accounting with an emphasis on the interpretation of financial statements. The first third of the course presents an overview of the accounting model, its aims, its continuing evolution, and the notion of earnings persistence. Without a solid understanding of this material, the remainder of the course will prove to be very difficult. Accordingly, I urge you to keep up with the course from the start. The last portion of the course focuses on how corporate financial statements report particular economic events. We will discuss the generally accepted accounting principles for these events, their limitations, their alternatives, and the notion of earnings quality. By the end of the course, you should feel comfortable with a company’s annual report. You should be able to come to a reasoned conclusion about a company’s financial health and be able to make comparisons across firms and periods. You should be able to pick up a set of financial statements, understand where the numbers came from, and be able to take the statements apart and put them back together again so that they suit your decision making needs. Materials Required Hirst and McAnally, Cases in Financial Reporting, Third Edition, Prentice Hall, 2001. Pratt, Financial Accounting in an Economic Context, Fifth Edition, Wiley, 2003. A calculator that performs basic business functions (i.e., time value of money calculations). Cases in Financial Reporting provides you with exposure to a wide range of financial disclosures. The bulk of our class time will be spent on the cases in this text. The Readings package consists of articles primarily from The Wall Street Journal. The purpose of these readings is to place the concepts we discuss into perspective and to examine the impact of accounting standards on decision making. We strongly encourage you to do additional reading of this nature. It will not only improve your understanding of the role of financial accounting but also will broaden your knowledge of business. The package of Solutions to Text Problems contains solutions to the problems from the textbook. The Old Exams & Solutions section of the solutions on the webpage contains samples of the types of examinations you can expect to see.
  2. 2. James Noel BA 384T—Fall 2002 page 2 Course Requirements and Grading Your grade in the course will be determined as follows: Points Participation 40 Written case responses 50 Group Project and presentation 100 Midterm 135 Final 175 500 The historical distribution of grades has been roughly as follows: 35% A, 10% below B, remainder B. Participation In general, we expect students to arrive on time and prepared to discuss the day’s topic and case. We expect professional conduct in the classroom at all times. Written case responses For each class session, you should familiarize yourself with the topics covered in the assigned chapter of the textbook. For each class session, you are responsible for reading one or more articles taken from the business press. The list can be found on the course web page and will be updated during the semester as new articles are published. You may come across articles relevant to the accounting topics we are studying as you read the Wall Street Journal and other periodicals. We encourage you to bring them to our attention. Each day, we take up at least one case from the Hirst & McAnally casebook. It is critical that you become acquainted with the basics of each case before class. To help you prepare for the conceptual portion of each day’s case we ask that you “think about” some parts of the case. In thinking about these case questions, you may wish to consult the textbook, the readings packet, or discuss the questions in your study group. The first part of class will be spent emphasizing the important points and economic consequences of the ”think-about” parts of the day’s case. You should be fully prepared to discuss these in class. To help you prepare for the analytical portion of each day’s case discussion, we require a written response to other parts of the case labeled “write about” in the schedule. Your response is to be turned in prior to class to provide evidence that you were prepared for the case analysis that day. Your preparation will be rewarded: your written response will be graded on a scale of 0-2. Evidence that you attempted all “write-about” parts of the case will earn 2 points. An incomplete attempt will evidence less preparation and will receive 1 point. Responses not turned in will receive 0 points. The emphasis here is on effort and not result. Working toward the “correct” answer is not the point; working to understand the case and the underlying accounting issues is what it’s all about. Late case responses will not be accepted. Electronic case responses will not be accepted. There are 20 assigned written responses. We will give you two free rides. That is, you need to turn in only 18 responses. You choose the two you want to skip. The case questions are representative of those you will find on your examinations. We urge you to review and rework the old tests and the additional problems included in Cases in Financial Reporting. NOTE: We have also included a number of questions from the Pratt text on the syllabus. We will not cover these in class. They were selected as a subset of problems that you should be able to complete. While it is important that you are able to answer these questions, mastery of these problems is insufficient for success in this course. Accordingly, we urge you to look at these textbook problems prior to attempting the casebook material. If you understand them, move on to the case. If, after attempting the case, you are having difficulties, go back to the relatively straightforward textbook questions and become comfortable with the fundamentals.
  3. 3. James Noel BA 384T—Fall 2002 page 3
  4. 4. James Noel BA 384T—Fall 2002 page 4 Pedagogical Philosophy Some of you will experience a bit of a shock when you find out how this course is run. When you were undergraduates, your professors probably covered the material in class then sent you home to try some problems on your own. That’s not the way this class works. We’ve adopted a much more active learning approach. For each class session, you are expected to read the material, try some suggested basic textbook problems, and then do the required case. For many students, this will be the first time you’ve covered the topic. As such, you’re likely to struggle. It’s through this struggle that learning takes place. The world is changing far too quickly for us to teach you everything there is to know about accounting or business. You have to pick up self-education skills. It’s not easy, so we’ve compensated by grading your written case responses based entirely on effort and not accuracy. Although you may grumble and complain, we’re not going to change the “read-do homework-take up in class” order around which the course is based. The feedback we’ve received from prior students at the end of the semester suggests strongly that this is the best approach. Group Financial Statement Analysis Project As part of the cohort system, you have been assigned to a small team or study group. For your final project, your group will assume the role of a financial analyst and conduct research for a client (e.g., an individual investor or a portfolio manager; alternatively, you could assume the role of a product manager evaluating competitors). Your client has asked you to analyze the financial statements of three companies from the same industry (two are domestic companies, the third a foreign company). You should choose the industry and companies now so that you can obtain their annual reports and begin doing any necessary research. The research we have in mind includes searching some of the on-line databases available in the PCL or on the Internet. You should search for information about your industry and companies. What are the major trends in the industry? Have any significant events happened at your companies that will be important to consider as you analyze their results? Who are the companies’ major competitors? And so on. The report is due on Session 23, the penultimate class session. The format requirements of the report are: •Six pages maximum—Your report should include supporting analyses as appendices to the six pages. However, the six pages should stand on their own. We will not grade work beyond the sixth page. Really. This will likely prove to be a significant constraint. We want to impose discipline in your writing. There’s nothing worse than having to read a long report that doesn’t say anything. Make your point, support it, and move on. •Typed, double-spaced—We can spot single-spaced and 1.5 spaced work in our sleep. •One-inch margins all around—We own rulers. Really. •Standard type-size (e.g., 12 point Times)—We own computers. We know our fonts! •PLEASE DO NOT PUT PLASTIC OR CARDBOARD COVERS ON YOUR REPORT. Your final report should not consist merely of annotated tables of ratios. Ratio analysis is necessary, but not sufficient, to analyze financial statements and provide a useful report or recommendation. It is not an end in itself. You must discuss concisely the subject firms’ profitability (including quality and persistence of earnings), cash flows, asset utilization, debt servicing (liquidity, solvency and reserve funds), risk assessments and overall assessments from an outside user perspective. We will discuss this further in class. You’ll find more details about the project on the course homepage. We have included some notes on the DuPont model, writing tips, and suggestions along with some report formatting examples. Information about presentations will be disseminated over the course of the semester. There are several deadlines for the group project. We have instituted them to ensure that you don’t leave things until the last minute. The early tasks involve choosing the industry and companies, getting the information, and generating the raw data you’ll need later. Most of this work can be done before the end of September. By doing it early, you’ll have more time to devote to analysis later in the semester. We are hopeful that this will lead to even higher quality reports than those that we’ve received in the past.
  5. 5. James Noel BA 384T—Fall 2002 page 5 Milestone Date Points Choose industry and company. First-come, first served. None One group per industry. Choices must be submitted via e-mail. Submit a copy of each company’s annual report. The first Session 10 – September 10 points—2 points page of the Form 10-K or annual report is preferred. 30th off for each day late Submit common-size F/S and a table of ratios for each Session 16 – Nov. 4th 20 points—4 points company. No interpretation of the data is required at this off for each day late stage. Your data should cover at least three years of B/S, I/S, and SCF data. Use the DuPont framework to organize your analyses Submit your completed analyses. Session 23 – Dec. 2rd 50 points In-class formal group presentations Session 23– Dec. 2rd 20 points Session 24 – Dec. 4th Total 100 points Examinations There are two examinations for this course, midterm examination and a final. Anyone missing an exam will automatically receive a grade of zero for that test. Exceptions for documented medical or family reasons may be permitted. Where possible, either the department office or the professor should be contacted prior to the time of the exam. At our discretion, either a make-up exam will be scheduled or a reallocation of the weight of remaining examinations will be made. Both exams will consist of short written answers and problems. Each exam will be based in large part on the annual report of a particular company. Questions will rely both on the actual numbers in the report as well as ‘made-up’ numbers. We will provide you with either a copy or information on where to get a copy of each annual report early in the course. Prior to each exam, we will specify which portions of the annual report you will be responsible for. It is your responsibility to read and understand the material. The midterm is scheduled for Monday, October 7 at 6:30 P.M. The midterm is closed book. You may bring a non-programmable calculator to the midterm exam. The final examination is open book, open notes, etc. Laptops are not permitted in either exam. The annual reports we will use are: • Midterm: Cutter & Buck, Inc. • Final: Whole Foods Market, Incorporated Preparation for the Examinations Success on any examination depends largely on your preparation and the application of common sense. The exams in this course are very similar to the cases we cover in class. As such, mastering the cases is an important step in preparing for the exams. If you want more practice, try some of the cases we don’t cover in class and be sure to work through the old exams. Don’t feel that you have to wait until the day before the exam to look over the old ones. After we’ve covered accounts receivable, find the receivables questions on the old exams and try them. After we cover long-term debt, find the long-term debt questions and try those. If you don’t feel you understand the material, don’t wait until just before the exam to try to “get it.” Come to office hours, see one of the T.A.s, regularly attend the help sessions, post a message to the class discussion group, or ask one of your group members.
  6. 6. James Noel BA 384T—Fall 2002 page 6 We can assure you that reading the textbook and doing the end-of-chapter exercises is insufficient preparation. Every semester, some students make this mistake. You need to go well beyond that level. Focus on the cases. Weekly Help Sessions Each Tuesday from 6-7 P.M., drop-in help sessions will be held by the course teaching assistants (T.A.s). The room is to be announced (TBA). These meetings are strictly optional and are aimed primarily at students with little or no prior accounting background. A set of basic problems has been developed for each help session and these are available, along with the solutions, on the course web page. You are encouraged, but not required to work on the problems before the help session. The T.A. will work on these problems during the help session. In addition, the session will provide an opportunity to review cases already covered in class and to clarify any concepts that you have not fully grasped. The sessions are not designed to help you with upcoming cases nor cover advanced topics. Academic Dishonesty We have no tolerance for acts of academic dishonesty. The responsibilities for both students and faculty with regard to the Honor System are described on the MBA web page .By teaching this course, we observe all the faculty responsibilities described therein. At the Ethics workshop held during Orientation, you signed the Honor Code Pledge. In doing so, you agreed to observe all of the student responsibilities of the GSB Honor Code. If the application of the Honor System to this class and its assignments is unclear in any way, it is your responsibility to ask us for clarification. As specific guidance for this course, you should consider the writing of all examinations to be an individual effort. Group preparation for examinations is acceptable and encouraged. Homework assignments are to be turned in individually. Although we expect (and even encourage) you to work on these assignments in groups, you should write-up your submissions individually. That is, you should not have one group member type the solution and share the document, electronic or otherwise, with the other members. Doing so is not only an act of academic dishonesty, but significantly reduces the learning experience. If such cases come to our attention, all parties involved will receive grades of zero for that assignment. Repeat offenses will be dealt with more harshly. A Note to Foreign Students Many foreign students experience a degree of “culture shock” when they get to UT—Austin. They may be used to extremely formal relationships between students and professors and they may tend not to ask questions or speak unless called on. In our class, we prefer an informal atmosphere. Feel free to address us by our first names. Ask questions at any time. Don’t worry about your accent or what others think. The classroom is a place to practice and learn, not a place to worry. A Note to Non-Foreign Students Look around. You may notice that your class has a substantial number of foreign students enrolled. Take advantage of this resource. Learn about other countries and cultures. Learn how business is conducted elsewhere. It seems trite to speak of the globalization of business, but that is just what’s happening. Don’t let this resource go untapped. Students with Disabilities Upon request, the University of Texas at Austin provides appropriate academic accommodations for qualified students with disabilities. For more information, contact the Office of the Dean of Students at 471-6259, 471-4641 TTD.
  7. 7. James Noel BA 384T—Fall 2002 page 7 Schedule Session 1 August 28th Introduction – Financial Accounting and Its Economic Context Learning Objectives Course overview DuPont Analysis – An Introduction Session 2 September 4th The Financial Statements Learning Objectives The four major financial statements Relationships among the financial statements Major uses of financial statements Differences among financial statements of different companies The role of estimates in financial accounting Textbook Chapters 1 & 2; skim Chapter 5 (Do not read textbook appendices unless instructed to do so) Readings Pressure to Meet Expectations Fostered Abuses at WorldCom WorldCom’s Disclosure Highlights Estimates that Underlie Reserves Suggested Exercises E2-3, E2-4, E2-6, and E2-12 Case Maytag—Understanding Financial Statements Think-about parts a to e Write-about parts f to k Session 3 September 9th The Mechanics of Financial Accounting Learning Objectives The accounting equation The accounting cycle Interpreting economic events Journal entries and closing entries Financial statement preparation Textbook Chapter 4 including Appendix 4A Readings Trying to Catch WorldCom’s Mirage Corporate America Gets Slammed Suggested Exercises E4-2, E4-3, E4-5, E4-8, P4-3, and P4-1 Case Food Lion, Inc.—Preparation of Financial Statements Think-about part a Write-about Journal entries for parts b and f Laptop Bring your laptop to class.
  8. 8. James Noel BA 384T—Fall 2002 page 8 Session 4 September 11th Accrual Accounting & Adjusting Journal Entries Learning Objectives The accounting cycle revisited Financial statement preparation Textbook Chapter 4 including Appendix 4A Readings Europe’s Immunity to Enronitis Suggested Exercises E4-16, E4-19, P4-7, and P4-16 Case Abercrombie & Fitch—Transactions and Financial Statements Think-about This is the last time we will be constructing a complete set of financial statements. Make sure you understand the mechanics of financial accounting by the end of this class. For those of you who are comfortable preparing financial statements, be sure to look over parts h through j. Write-about parts a to g ***NOTE SESSION 5 IS A SPECIAL FRIDAY SESSION in GSB 3.138*** Session 5 September 13th Time Value of Money Learning Objectives The nature of the investment decision Time value of money Relative risk and the concept of an opportunity rate of return Future and present value of lump sums and annuities Valuation of investment opportunities Textbook Appendix B Readings How to Avoid Investing in Enron II? Suggested Exercises All these problems are in Appendix B: EB1, EB2, EB3, EB5, PB4, and PB7 Cases Maya, Inc.—Return on Investment Think-about part a Write-about parts b, c, d Hydron Technologies Corporation—Lease or Buy Think-about parts a, b, and d Write-about part c
  9. 9. James Noel BA 384T—Fall 2002 page 9 Session 6 September 16th Measurement Fundamentals Learning Objectives Implications of the cost, realization and matching principles for valuing assets and liabilities Value of a firm: discounted cash flows approach Alternate valuations of assets and liabilities Value of net assets versus the value of the firm Value additivity and goodwill Textbook Chapter 3 Readings AES Aims to Demystify Its Reporting Suggested Exercises BE3-1 and E3-3 Case Maple Leaf Gardens—Valuation Think-about part a Write-about part b Session 7 September 18th Valuation and Earnings Persistence Learning Objectives Relationship between income and cash flows Income, capital conservation and growth Earnings persistence and prediction of future cash flows Textbook Chapters 3 and 13 Readings FASB: Rewriting the Book on Bookkeeping On the Same Page Suggested Exercises E3-8, P3-7, BE13-1, and E13-7 Cases Maple Leaf Gardens Write-about parts c and d GTE—Persistence of Earnings Think-about parts a to e
  10. 10. James Noel BA 384T—Fall 2002 page 10 Session 8 September 20th Statement of Cash Flows—Analysis Learning Objectives Information in a cash flow statement Financing activities and cash flows Investing activities and cash flows Operating activities and cash flows Income statement coverage of activities v. coverage in cash flow statement Preparation methods—overview Textbook Chapter 14 Readings Companies can Trumpet EBITDA to Mask Their Unprofitability ‘Unusual Expenses’ Raise Concerns Cash Flow Statement Offer the Juiciest Corporate Dirt Suggested Exercises BE14-2, BE14-3, E14-7, E14-10, and P14-1 Case Frederick’s of Hollywood—Statement of Cash Flows Think-about parts a to f Write-about parts g and h. Session 9 September 25th Statement of Cash Flows—Mechanics and Insights Learning Objectives Relationship among the balance sheets, income statement and SCF Direct approach to preparing a statement of cash flow (SCF) Indirect approach to preparing a cash flow statement Textbook Chapter 14 and Appendix C Readings ‘Cash Flow,’ a Highly Touted Measure of Strength, … Sadly, There Days Even Cash Flow Isn’t Always What It Seems to Be Suggested Exercises E14-19, P14-11, and P14-17 Case Weis Markets Inc.—Statement of Cash Flows Write-about all parts Session 10 September 30th Accounts Receivable Learning Objectives Allowance method of accounting for bad debts Inferring bad debt expense, collections, etc. from account analysis Quarterly financial reporting on Form 10Q Textbook Chapter 6; Skim Appendix 6A Readings Time Bandits Is Citigroup Set for a Rainy Day? Case Warnaco—Accounts Receivable Think-about parts a to f, and k Write-about parts i and j. In class we will do part g together.
  11. 11. James Noel BA 384T—Fall 2002 page 11 Session 11 October 2nd Revenue Recognition Learning Objectives Revenue recognition concepts Window dressing Textbook Chapter 6; Skim Appendix 6A Readings Global Crossing’s Use of Swaps to Boost Revenue Wasn’t Unusual Merck Books Co-Payments To Pharmacies as Revenue Peregrine Replaces Its CEO, CFO As Accounting Inaccuracies Surface SEC Broadens Its Investigation Into Revenue-Boosting Tricks Suggested Exercises E3-4, E3-5, ID3-1, E6-6, P6-3, and P6-7 Case Analog Devices Inc.—Revenue Recognition Think-about parts a to g Write-about parts h to j Sessions 12 and 13 October 7th MIDTERM Cutter & Buck Inc. 6:30-8:30PM Session 14 October 28th Inventory Learning Objectives Definition of inventory and inventory flows Perpetual versus periodic inventory accounting Inventory cost flows and alternate assumptions Effects of cost flow assumptions on assets and income when prices change Effects of changing cost flow assumptions on assets and income Textbook Chapter 7 Readings Accounting for Manufacturing Inventory SEC Investigating Bristol-Myers Too Many Thin Mints: Spotting The Practice of ‘Channel Stuffing’ After Roaring Through the ‘90s, Harley’s Engine Could Sputter Suggested Exercises E7-7, E7-10, P7-4, P7-9, and ID7-4 Case Lands’ End, Inc.—Inventory Think-about parts a to c, and g Write-about parts d and e
  12. 12. James Noel BA 384T—Fall 2002 page 12 Session 15 October 30th Property, Plant & Equipment Learning Objectives Items included in the cost of a long-lived asset Depreciation—estimates required, patterns or methods Leased assets Disposition and write-downs of depreciated assets Inferences from account analysis Textbook Chapter 9 Readings Nervous Investors Question Telecom Accounting Practices WorldCom Internal Probe Uncovers Massive Fraud Suggested Exercises E9-1, E9-4, E9-7, E9-12, P9-10, and ID9-1 Case Frederick’s of Hollywood—Property, Plant, and Equipment Think-about parts a to d Write-about parts e to i Session 16 November 4th Other Long-Term Assets Learning Objectives To capitalize or not to capitalize Research and development Goodwill and other intangible assets Management choice versus accounting policy Textbook Chapter 9 especially Appendix 9A Readings Stock Gurus Disregard Most Big Write-Offs, … Suggested Exercises E9-19 Case Chambers Development—Capitalizing Costs Think-about parts a to c Merck & Co., Inc.—Research and Development Think-about parts a and b Write-about parts c and d
  13. 13. James Noel BA 384T—Fall 2002 page 13 Session 17 November 6th Economics of Liabilities Learning Objectives Liability definitions Current versus long-term classification Determinable versus contingent liabilities Noncurrent debt financing Cash flows and interest costs Valuing noncurrent liabilities Allocating interest costs—effective interest rate method Textbook Chapter 10, Chapter 11 and Appendix 11A, omit pp 476-480 Readings Sinking Commercial Paper Market … Dow Chemical Remains Silent on Exposure to Asbestos Cases Qwest Amends Unsecured Debt Pact … Suggested Exercises E10-3, E10-4, E10-6, E10-8, E10-9, and ID10-7; E11-3, E11-4, E11-9, E11-13, and E11-15 Case Maytag Corporation—Warranties and Deferred Taxes Think-about parts a to c Write-about parts e and g Bally Entertainment—Long-Term Debt Think-about part a Hint: Refer to the WSJ Interactive’s glossary for help. Write-about parts b to e Session 18 November 11th Noncurrent Liabilities—Leases and Off Balance Sheet Items Learning Objectives Applying the effective interest method to other liabilities Capital leases versus operating leases Off-balance-sheet financing Textbook Chapter 11 especially pp 476-480 Readings With Airlines in a Post-Sept. 11 Dive (background reading about leasing) What Evil Lurks Somewhere Beyond Firms’ Balance Sheet? Off-Balance Sheet Items Hold The Key for Curious Investors Suggested Exercises E11-22, P11-14, and P11-15 Case American Airlines—Leases Think-about parts a to c Write-about parts d, g, and I
  14. 14. James Noel BA 384T—Fall 2002 page 14 Session 19 November 13th Stockholders’ Equity Learning Objectives Equity financing Components of stockholders’ equity Treasury stock (cost method) Debt and equity equivalents Textbook Chapter 12 Readings Debt Reduction in Telecom Area May Hurt Stocks Maytag Plans Products, Cost Cuts, But Low Equity Remains a Hurdle Low-Key Preferred Stock Could Ease the Low-Yield Blues Suggested Exercises E12-1, E12-4, E12-7, P12-9, P12-10, and ID12-3 Case Dow Chemical—Treasury Stock Think-about part d Write-about parts a to c and e Session 20 November 18th Marketable Securities & Long Term Investments Learning Objectives Marketable securities: trading, available for sale and held to maturity Investments in affiliate or associate companies – equity method Comprehensive income Textbook Chapter 8 Readings Has Coke Been Playing Accounting Games? Venture Capital: Should Intel Stick to Its Day Job? Bringing the Future into Play Suggested Exercises E8-3, E8-10, P8-4, P8-5, P8-8, and ID8-4 Cases Wachovia—Investments in Common Stock Think-about part g Write-about parts a to d BCE Inc.—Investments in Other Companies Think-about parts a to c Session 21 November 20th Financial Statement Analysis I Learning Objectives Ratio analysis and the DuPont Model Tools of analysis Writing an analysis Textbook Chapter 5 Readings Dangerous Games Group Project Tip Sheet
  15. 15. James Noel BA 384T—Fall 2002 page 15 Session 22 November 25th Financial Statement Analysis II Learning Objectives Objectives of financial statement analysis Textbook Chapter 3 Readings Confused about Earnings? Scrutinize This! Accounting Scandals May Lurk at Asian, European Companies System Failure Suggested Exercises E5-3, E5-5, P5-11, and ID5-8 Case Boston Beer and Lion Brewing—Financial Statement Analysis Think-about parts a and f Write-about parts b to e. You may submit a group response for this case only. You may work with any classmates you choose. Thanksgiving Holiday November 27th – no class as we make up for the Friday session we had in September so that we had an equal number of sessions before and after the Plus Program. Use this time to work on your group financial statement analysis projects. Session 23 December 2nd In-class presentations Session 24 December 4th In-class presentations FINAL EXAMINATION Whole Foods Thursday, December 12